Business models for successful mobile money services are still vague and no one is yet sure what services will ultimately be successful in the mass market.
This is according to Yolande van Wyk, CEO of First National Bank's (FNB's) eWallet solutions in SA. She notes that the much-hyped phenomenon of mobile money is more complex and nebulous than many assume, with few success stories arising from the 140-odd mobile money deployments in the realm.
FNB, says Van Wyk, is addressing the unproven frontiers of mobile money by creating new markets steeped in cash and micro-payments, largely within the sphere of what she terms the “unbanked” and “unbankable”.
“We need to remember that the financial behaviour of the poor is driven by their daily needs - saving and borrowing money in small amounts.”
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Van Wyk says it is the bank's duty to find a way that everyone can use a service - in this case digital banking solutions. She cites FNB's eWallet - introduced to the market in 2009 - as one of the solutions aimed at adoption across the board.
The service, which enables FNB customers to send money or pay anyone with a South African cellphone number - independent of a linked bank account - has seen over 500 000 eWallets created to date, with R2 million being sent daily.
In addition to this, the bank recently launched Pay Wallet - a similar service that enables employers to pay their unbanked employees' earnings to an eWallet on their cellphone. She says these services become pertinent when one considers some of the latest statistics on SA's financially excluded population (9.1 million) from the latest FinScope SA report:
* 23% of South African adults earn less than R1 000 per month;
* 65% of South Africans receive money from others; and
* 26% of adult South Africans are either sending (5.2 million) or receiving (5.3 million) money to or from family members, parents and children.
Evidence that inroads are being made in the mass market via cellphone banking solutions such as eWallet and cellphone banking, says Van Wyk, exists in another number - 42%, which is the fraction of domestic remittances that were done via mobile money over the 12-month period monitored for FinScope SA.
Van Wyk says over four million South Africans actively and regularly use FNB's cellphone banking to, among other things, purchase prepaid airtime and prepaid electricity. The service is available by dialling a designated number and does not involve any downloads or SIM requirements.
According to Van Wyk, FNB's banking app, currently a service unique to the bank, is also becoming more available to lower-income groups, despite it being obtainable on smartphones only. “We are seeing a lot more smartphones for the bottom end of the market coming in, with some now costing as little as R700. So the Banking App will only become more applicable to the mass market as time goes by and technology moves on.”
The eWallet Solutions team aims “to ensure each of the 50 million South Africans have access to formal financial services and to bring this vision to the rest of Africa”.
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